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“A solution in search of a problem” is a low-rates phenomenon

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Re: “A solution in search of a problem” is a low-rates phenomenon

#91

Post by xyzelement »

PaulHoule wrote: post #87
xyzelement wrote: post #35

Earlier quoted context omitted.

// People are getting mortgage sized loans just to buy a family car I mean... That's insane hyperbole right? Below you are talking about $30k cars, in what universe does that approach "mortgage sized"?

Funny I just was in line at my credit union and caught a look at their balance sheet. In October they had $281,996,350 outstanding in auto loans compared to $462,003,191 in mortgage loans and $68,035,664 in HELOC. Auto loans turned out to be bigger relative to mortgages than I expected but maybe my credit union writes a lot of auto loans.

One thing that could be in play is mortgage originators often sell loans to other investors post-origination. I am talking about Fanny Mae and Freddy Mac and others, who hold a ton of homeowner debt on their books.

460 million of loans is about 1000 average-sized mortgages at issuance - if your CU's entire business was 1000 loans they'd probably not bother with it since the staff and infrastructure to do it is such a pain in the ass. Chances are this represents some unknown percentage of total issuance that just happened to not have been sold.

Re: “A solution in search of a problem” is a low-rates phenomenon

#92

Post by lesuorac »

cedilla wrote: post #51
ElevenLathe wrote: post #37

Earlier quoted context omitted.

An industry basically can't ever make a profit is not a solution to anything.

All the goods and people transported won't mind that a few shareholders were unhappy.

They might be unhappy when the profitable business are all ran out of town and the unprofitable ones collapse leaving neither behind.

Re: “A solution in search of a problem” is a low-rates phenomenon

#93

Post by ElevenLathe »

RC_ITR wrote: post #57
ElevenLathe wrote: post #37

Earlier quoted context omitted.

An industry basically can't ever make a profit is not a solution to anything.

Guess all that drinking water we have is just a waste then. Highways too. Airlines are unique in that they're essentially a public good that we've allowed to be a private market (look at how often the government intervenes in the industry). That doesn't mean that airplanes are pointless.

Absolutely. The entire building-airplanes-and-flying-them "industry" is a side effect of their necessity as weapons of war and toys for rich people (same thing, really). There is no rational reason for it to exist, especially knowing what we know now, but we're not a rational species.

Re: “A solution in search of a problem” is a low-rates phenomenon

#94

Post by myvoiceismypass »

electroly wrote: post #8
black_puppydog wrote: post #5

> [...] products that ultimately turned out to be dead ends, like the Palm Pilot [...] Huh? I never had a Pilot, but from everything I've read about it (and how people who did have one describe it) it was quite amazing, and arguably the predecessor of the smartphone, no? I get that the product line is dead, but the concept was very much viable...

I had several Palm devices. As I recall there was a fairly long gap between the death of PDAs and the birth of smartphones. I certainly did not replace my Palm with a smartphone; I replaced it with nothing, and then years later I got a smartphone. Most of the things that are amazing about smartphones were not present on my Palm IIIe, FWIW.

I went from a Palm PDAs (m105, Handspring Visor) to the Treo 650 as my first smart phone personally. And for years before the Treo, I was using some sort of cable tether to my phone to provide internet access to the PDAs. It was pretty cool.

I still miss Palm WebOS and the potential of the Pre/Pixi line.

Re: “A solution in search of a problem” is a low-rates phenomenon

#95

Post by spaceman_2020 »

obblekk wrote: post #24

I really dislike these takes on low interest rates. As far back as the 70s (when interest rates were 8-15%), there have been random business ideas being started and shutdown (pet rocks, every airline ever, etc.). We don't remember those because they shutdown 40 years ago. Today, we only see the successful ones that survived (walmart, fedex, etc.). There's a legit question: why have long term interests declined over t…

Counterpoint: The entire crypto market, which topped over $3 trillion in value at one point.

Even as someone who believes in crypto, some of the stuff being built is beyond stupid, and could only be built at a time when no real work needs to be done.

Like I understand Ethereum. I also understand basic DeFi projects building on top of Ethereum - Maker, Uniswap, AAVE, Compound, etc.

But once you start going a few layer deeper, you realize the sheer excess and waste. Like a project that allows you to wrap your leveraged positions in AAVE and deposit them into a dual-token vault and earn yield if one of the two tokens goes up or if there are liquidations in your AAVE or...

It's mind boggling that people thought spending their resources creating virtualization upon virtualization upon virtualization...

Somehow, I can't imagine something like this happening if you were paying 10% interest on your mortgage.

Re: “A solution in search of a problem” is a low-rates phenomenon

#96

Post by adav »

black_puppydog wrote: post #5

> [...] products that ultimately turned out to be dead ends, like the Palm Pilot [...] Huh? I never had a Pilot, but from everything I've read about it (and how people who did have one describe it) it was quite amazing, and arguably the predecessor of the smartphone, no? I get that the product line is dead, but the concept was very much viable...

From memory, I believe that the software from Palm lives on powering "smart" TVs.

Re: “A solution in search of a problem” is a low-rates phenomenon

#97

Post by spaceman_2020 »

ElevenLathe wrote: post #37
xyzelement wrote: post #34

Earlier quoted context omitted.

Hang on... This sub-thread is venturing into the territory of lumping airlines with "solutions in search of a problem" and that just doesn't make any sense to me. You can argue that airlines have not returned on the capital (it may be true, I have no idea) but there's clearly demand and utility for the product, as evidenced by nearly every flight being nearly or completely full at all times.

An industry basically can't ever make a profit is not a solution to anything.

Guess we need to shut down all the government subsidized schools in my country where tens of millions of poor kids study in every day.

Also shut down the unprofitable state funded hospitals for people too poor to afford private medical care.

Re: “A solution in search of a problem” is a low-rates phenomenon

#98

Post by nonrandomstring »

Shinmon wrote: post #55
nonrandomstring wrote: post #38

Earlier quoted context omitted.

> takes them about 1h. Automating it, is just more fun than actually doing it. Spot on. The joy of technological skill, being a programmer and engineer is that you can customise, reconfigure and shape the world in front of you. Other people see you playing and having fun, and say; "Hey, can you do that for me?" What was just scratching an itch becomes something others want to universalise. And that doesn't always wor…

Research proposals are not supposed to necessarily solve current real-life problems so there is nothing inherently wrong with that. But given the amount of startups coming out of universities, the mindset is crazily wrong. So many people coming with a technology. If it's software you can at least pivot easily but if you got some kind of hardware technology, it becomes much less simple to do that. > Low interest + eas…

> > It's a problem creation machine.

> Not sure if I understand you correctly

It is hopefully not an obtuse point but allow me to explain it with a story;

Teenage girl has a beauty spot. Her parents tell her it's a princess spot. Boys think its cute. She's happy. Some mean bitches tell her it's ugly and probably skin cancer. Now it's a problem. Nothing in reality had changed of course. And that's how solutions looking for problems go about the world creating new problems. It's in their interest to.

Re: “A solution in search of a problem” is a low-rates phenomenon

#99

Post by spaceman_2020 »

PaulHoule wrote: post #18

I know interest rates have a strong effect on tech stocks but my understanding is that they have their biggest impact on boring but capital intensive businesses such as cars and buildings. For instance Facebook was said to spend $10 billion on the "metaverse" last year but spending on building construction was about $1.5 trillion https://www.zippia.com/advice/us-construction-industry-stati... that said, total spendin…

I guess the retort is that even when such projects fail, they leave behind something material that can be repurposed.

If your manufacturing plant fails, the warehouse, factory, machinery, etc. are all reusable and last a long time. Heck, so much of the housing in major cities is built out of old factories.

If your startup selling virtual pet food for your digital hamster fails, what does it leave behind?

Re: “A solution in search of a problem” is a low-rates phenomenon

#100

Post by rightbyte »

mberning wrote: post #31
PaulHoule wrote: post #18

I know interest rates have a strong effect on tech stocks but my understanding is that they have their biggest impact on boring but capital intensive businesses such as cars and buildings. For instance Facebook was said to spend $10 billion on the "metaverse" last year but spending on building construction was about $1.5 trillion https://www.zippia.com/advice/us-construction-industry-stati... that said, total spendin…

Homes and cars are simply out of control. People are getting mortgage sized loans just to buy a family car. Something which will become worthless over 10 years of use. Getting a mortgage on a home is now a non-starter for a huge swath of the population. I suppose I can somewhat understand the price of homes going up. It's a durable item that, if reasonably maintained, has an unlimited useful life. A car on the other…

> A car on the other hand, no matter how well maintained, will become worthless in a decade.

Uhm ... my 24yo Volvo disagrees.

The resale price of 120k+ mile cars is silly low compared to the value you get from using them. Don't tell anyone though. I want this market for my self.

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